KUALA LUMPUR: MBSB Bank Bhd is raising RM5 billion of 10-year trust certificates, billed as the world's first sustainability Sukuk Wakalah programme to be issued by an Islamic bank.
MBSB Bank today signed an agreement with Maybank Investment Bank Bhd for the establishment of the sukuk.
MBSB Bank acting chief executive officer Datuk Nor Azam M Taib said the sukuk would have a perpetual tenure.
"The issuance will be based on the landmark tenure of 3,5,7 or 10 years. Nevertheless, each issuance shall have a tenure of more than one year," he told reporters at the sukuk signing ceremony today.
Nor Azam said the proceeds raised would be utilised to finance or refinance, in part or in whole, future and existing eligible Shariah-compliant financings.
This includes for the construction and development of eligible projects which will be identified in accordance with the bank's sustainability sukuk framework.
"Prior to the sukuk issuance, the eligible sustainable project will be identified and approved by the approving authority of the bank.
"The asset or project should be shariah compliance and meet the criteria set out by MBSB Bank's sustainable sukuk framework. The proceeds shall then be channeled to the identified eligible asset or project," he said.
Nor Azam said the sukuk was essential in placing MBSB Bank in the sustainability space and in line with the current banking industry theme.
This will also allow the bank to continue to grow its sustainable generating assets including lending in the green projects, affordable housing, public health, education, small and medium enterprises financing and also the underserved segments.
"The sustainability label attached to our sukuk offers diversification to investors as we acknowledge there is a growing demand of sustainability sukuk in the market.
"This enables the bank to have access to a larger pool of investors including those with dedicated environment, social and governance (ESG) mandates," he added.
MBSB Bank said the landmark transaction demonstrated its support towards the government's sustainability agenda and initiatives as Malaysia continues to remain committed to push towards a sustainable future.
Maybank IB is the sole principal adviser, sole kead arranger, sole lead manager and sole sustainability structuring Adviser while Maybank Islamic is the Shariah adviser for the sukuk.